The United States federal government requires a wage of at least $2.13 per hour be paid to employees who receive at least $30 per month in tips.
In the state of Alaska, California, Minnesota, Montana, Nevada, Oregon, Washington, same minimum wage are applied for both tipped and non-tipped employees.
They argue that because restaurants have very thin margins, an increase in the minimum wage could lead to higher prices for consumers and fewer jobs available for potential employees.
A 2012 study found that eliminating the tip credit tends to decrease employment in the U.S. restaurant industry.
[16] Some argue that eliminating the tip credit exacerbates income inequality by benefiting the more well-paid servers at the expense of the non-tipped back-of-the-house staff.
[20] They also contend that, while employers are required to ensure that all employees receive the minimum wage after tips, the current system makes it possible for some employers to illegally coerce employees to over-report tips or dock their pay so that their final income is below the minimum wage.
[25] ROCUnited also looks to start campaigns to bring awareness to those not associated with the restaurant industry and to give workers voices.
For example, the ROCUnited found through a federal review there was fraud within hour and wage reporting and some restaurants were not making up for the money they owed their employees.
On the other side, those that are non-tipped occupations are cashier, cook, dishwasher, food-service managers, and counter attendants.
Most restaurants in a study by the NRA stated that they would not be able to financially recover after the hit of the pandemic and the struggles that they already had to deal with because of the lockdowns.
[27] Research from the NRA regarding the Federal Reserve Bank in Minneapolis states that in 2018 and 2019, full-service and limited-service restaurant jobs declined by 12% and 18%.